Eskom’s 9.61% electricity price hike — final approval granted

The National Energy Regulator of South Africa (Nersa) has confirmed that it has approved a 9.61% average electricity tariff increase for Eskom, which takes effect on 1 April 2022.

Municipalities will receive an average tariff increase of 8.61% as they are not allowed to increase their fees until 1 July. However, they must pay Eskom its higher tariffs during the three intervening months.

“The municipalities cannot increase their tariffs in the middle of their financial year, as it would not correspond with the revenue to be achieved from licensed municipal distributors,” Nersa stated.

“In this regard, Eskom will over-recover revenues in the first three months (April to June) of its financial year, hence municipalities will only experience an increase of 8.61% as opposed to the 9.61% that will be seen by the rest Eskom’sm’s customers.”

Nersa said it would issue the guideline for municipal distributors in due course, after consultation with stakeholders.

The regulator first announced that it had approved a 9.61% tariff increase for Eskom on 24 February.

Nersa chairperson Nhlanhla Gumede said during a media briefing that the regulator had approved the increase by balancing the interests of the economy, consumers, and Eskom.

The price hikes will take South Africa’s average electricity tariff from around R1.33 per kWh to around R1.46 per kWh.

Eskom had requested a 20.5% increase in its original application to the regulator.

Eskom said this would help cover the cost of its debt and the higher tariffs it is currently contracted to pay early independent renewable energy power producers.

Had Eskom’s initial application been approved, South Africa’s average standard electricity tariff would increase to approximately R1.61 per kWh.